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Don't Get Skimmed at the ATM

NEW YORK (MainStreet) —Over $1 billion in annual losses. That’s the U.S. Secret Service’s guesstimate of the extent of the fraud attributable to criminals who install so-called skimmers at ATMs which they use to collect all the information on a debit or credit card magnetic stripe. To boot, almost always there’s an associated camera that collects PINs.

Know what’s on the mag stripe - that’s the black bar on the back of the card; it has the account number, expiration date, security codes, etc. It also has the PIN on a debit card, and it is simple to create bogus cards that look and feel real to ATMs. Meaning they are good for a quick $600, $1,000, often more.

First, however, understand that we are hip deep in a rising wave of ATM skimming. For a simple reason.

“Would you rather make $30,000 in a year - or a day,” asked John Buzzard, a skimming expert with FICO, the credit monitoring company. He claimed skimming is on the rise, in part because the price of the gear to get into the scam has plummeted. Go shopping with a $5,000 budget, said Buzzard, and that’s plenty for a skimmer--a pinhole camera, card blanks, a magnetic stripe encoder, and that puts a thief in business. The gear also is easily acquired online, no questions asked.

An upshot: there are a lot more amateurs involved in skimming. Before, it mainly was organized gangs, often with Eastern European ties, who primarily worked the coasts. Now, literally, skimming occurs just about everywhere, and that means every consumer has to be alert.

The good news: bogus charges put on credit cards usually vanish with a phone call (note:more rights are preserved when charges are disputed in writing). Federal law caps losses to fraud on a credit card at $50.

The debit card picture - the card usually involved in ATM skimming -- is more clouded. Report within two business days of learning of fraudulent charges and your loss is capped at $50. Push that to 60 days and the maximum out of pocket loss is $500. After 60 days, losses are unlimited. Bottomline: get snagged in a skimming incident with an ATM card, and you are in for hours of haggling with your bank and you also could be out real money.

That is why you want to prevent becoming a skimming victim.

Here is a simple step that will keep you safe in almost all cases: Use one hand to block the view of what the other hand is doing when it punches in the PIN, said John Costa, the Security Officer at Philadelphia Federal Credit Union. “That alone would eliminate 90% of skimming victims.”

Wherever there is a skimmer, somewhere around the ATM there is a tiny camera put there by the crook. It’s cheap, small, and easy to foil. Thus the hand trick.

Step two: visually inspect the ATM - especially the slot where the debit card is inserted, advised David Pollino, a security expert with Bank of the West, headquartered in San Francisco.

Skimmers, usually, are slender pieces of plastic inserted into, or on top of, the slot. They are affixed with two-sided tape as a rule. Give the slot a shake, said Pollino, and you often will immediately know if something is very wrong.

Step three: Use ATMs in busy, well-trafficked areas, preferably inside a building. “Most skimmers are found on outdoor ATMs, and in places that are not monitored 24/7,” said Claes Bell, a skimming expert with Bankrate.com. Even for a pro it takes some minutes to properly affix a skimmer, and that same pro knows to avoid the ATMs that are monitored by security cameras. So he wants a machine that gets enough traffic for him to bother putting on a skimmer, but he definitely does not want to try this trick in a bank lobby, say.

Protect yourself by learning to think like a criminal: where would you put a skimmer?

Last step: where possible, avoid using ATMs long after banking hours - on weekends, for instance. Why? The crooks prefer times when bank employees aren’t likely to be scrutinizing ATMS, and maybe not even the surveillance cameras. 6 p.m. on a Saturday night may be just about ideal for slapping on a skimmer - which usually has ample battery power to run only a couple to four hours.

Take just those four steps and, right there, you have cut the likelihood of you becoming the next skimming victim to near zero.